On June 30, 2018, Clooney Printers purchased a printer for $59,000. It expects the printer to last for four years and have a residual value of $6000. Compute the depreciation expense on the printer for the year ended December 31, 2018, using the straight-line method. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The depreciation expense using the straight-line method is calculated by subtracting the residual value from the cost of the asset and then dividing by the useful life of the asset. Here, ($59,000 - $6,000) / 4 = $13,250 annual depreciation. Since the printer was purchased on June 30, 2018, only half of the year's depreciation applies for 2018, so $13,250 / 2 = $6,625.

On June 30, 2018, Clooney Printers Purchased a Printer for $59,000